German automaker Volkswagen plans to freeze wages worldwide at 2026 levels through 2030, labor union IG Metall said Monday, as wage negotiations begin in Germany.
Volkswagen’s executive board instructed human resources managers worldwide to suspend pay increases, according to a union publication citing the company’s European and Global Works Council.
The directive has been in effect since early October, replacing a budgeting approach that allowed compensation for inflation and locally negotiated wage increases, the publication said.
The works council expects strong resistance to the plan, arguing that pay decisions remain the responsibility of local employers and unions.
IG Metall is seeking a 5% wage increase over 12 months.
Volkswagen employs more than 660,000 people worldwide, including 275,000 in Germany, according to the union.
Works Council President Daniela Cavallo asked management Sunday evening to explain the plan to employees.
The union said management had yet to provide a statement.
Worker representatives warned that a prolonged wage freeze would erode employees’ purchasing power.
They urged management to focus instead on competitive products, technological advances and cooperation across the group.